Goathland village is 500 feet above sea level and has a history extending from Viking times. In 1109 King Henry I granted land to Osmund the priest and brethren of the hermitage of Goathland, then called Godelandia for the soul of his mother Queen Matilda, who had died in 1083. This is recorded in a charter held at Whitby Abbey.[3] The village was a spa town in the 19th century. There are many hotels and guest houses in the village, the largest, the Mallyan Spout Hotel, is named after a nearby waterfall. There is a caravan site, reached by driving along the track which is the site of the older railway route, 1835 to 1860.

Much of the surrounding land is owned by the Duchy of Lancaster. The Duchy's tenants have a common right extending for hundreds of years to graze their black faced sheep on the village green and surrounding moorland.

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The village was the setting of the fictional village of Aidensfield in the Heartbeat television series set in the 1960s. Many landmarks from the series are recognisable, including the stores, garage/funeral directors, the public house and the railway station. The pub is called the Goathland Hotel, but in the series is the Aidensfield Arms. After filming for some years a replica was built in the studio.[citation needed]

Goathland railway station is on the North Yorkshire Moors Railway. The railway is run by a charitable trust with some paid staff but is mostly operated by volunteers, running nearly all the year including Christmas. It carries more than 250,000 passengers a year and is the second-longest preserved line in Britain. It links Grosmont in the north with Pickering in the south, along the route of the Whitby - Pickering line built by George Stephenson in 1835 and upgraded in 1865. From 2007 some trains on the railway were timetabled to run to Whitby and in March 2014 work began in Whitby station to replace a platform and allow more North Yorkshire Moors Railway services to be timetabled Whitby - Pickering.

Goathland railway station was used as the location for Hogsmeade railway station in the Harry Potter films, and the line filmed for Harry's journey.

As well as serving as the location for the fictional village of Aidensfield, Goathland features in its own right as an important setting in Dan Chapman's 2014 dystopian, futuristic novel Closed Circuit. Forming a setting for the denouement of the novel, it is explained that the antagonist owns the entire village, and the nearby MoD site serves as a base for his operations.[4] Goathland also features in "Ice", a novel by Australian writer Louis Nowra (Allen & Unwin, 2008).